Treacherous WatersTreacherous Waters
A recent Internal Revenue Service Chief Counsel Memorandum concluded that a trust could not claim a charitable income tax deduction after it had received taxable IRA distributions (that is, income in respect of a decedent or IRD)1 and then distributed the amounts to charities. The ability of an estate or trust to claim a charitable income tax deduction may be further complicated by a new proposed
Christopher R. Hoyt
A recent Internal Revenue Service Chief Counsel Memorandum concluded that a trust could not claim a charitable income tax deduction after it had received taxable IRA distributions (that is, income in respect of a decedent or IRD)1 and then distributed the amounts to charities. The ability of an estate or trust to claim a charitable income tax deduction may be further complicated by a new proposed Treasury regulation holding that whenever a governing instrument specifies a source of income (such as IRD) to be used for a charitable income tax deduction, the instructions must have an economic effect independent of income tax consequences in order to be respected.2
In other words, there are new challenges to successfully pa...
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